increase font size
Fonterra chief executive Miles Hurrell.
Fonterra chief executive Miles Hurrell says the sale of the co-op’s consumer and associated businesses to Lactalis represents a great outcome for the co-op.
“As the world’s largest dairy company, Lactalis has the scale required to take these brands and businesses to the next level. Fonterra farmers will continue to benefit from their success, with Lactalis to become one of our most significant Ingredients customers,” says Hurrell.
“At the same time, a divestment of these businesses will allow Fonterra to deliver further value for farmer shareholders and New Zealand by focusing on our world leading Ingredients and Foodservice businesses, through which we sell innovative products to more than 100 countries around the world, from our home base here in New Zealand,” says Hurrell.
Lactalis CEO Emmanuel Besnier says “with this acquisition, we significantly strengthen our strategy across Oceania, Southeast Asia and the Middle East. Combining the Fonterra consumer business operations and market leading brands with our existing footprint in Australia and Asia will allow Lactalis to further grow its position in key markets.
“I'm delighted to become a key partner to Fonterra over the long term as well as I'm looking forward to welcoming new teams to the Lactalis family".
Under the sale agreement, that needs ratification by Fonterra shareholders and regulatory authorities, Lactalis will pay $3.845 billion for Fonterra’s global consumer business (excluding Greater China) and consumer brands; the integrated foodservice and Ingredients businesses in Oceania and Sri Lanka; and the Middle East and Africa Foodservice business.
There is potential for a further $375 million increase in the sale price from the inclusion of the Bega licences held by Fonterra’s Australian business, which if progressed would take the headline enterprise value of the transaction up to $4.22 billion.
The co-op is targeting a tax-free capital return of $2/share to share and unit holders, which is approximately $3.2 billion, following completion of the sale.
The sale also includes long-term agreement for Fonterra to sell milk and ingredients to Lactalis.
Farmer plans to hold a shareholder vote in late October or early November with notice of meeting to be issued in October.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.
OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.
Fonterra has delivered a fifth straight year of record organic milk price for farmer suppliers.
Fonterra says favourable weather conditions supporting pasture growth is boosting milk production.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
The ACT Party says media reports that global dairy giant Nestle has withdrawn from the Dairy Methane Action Alliance shows why New Zealand needs to rethink its approach to climate.
If there was a silver lining in the tragedy that was Cyclone Gabrielle, for New Zealand Young Grower of the Year, Grace Fulford, it was the tremendous sense of community and seeing first-hand what good leadership looks like.
New research could help farmers prepare for a future where summer rainfall is increasingly unpredictable and where drought risk is rising, no matter what.
The first calves of a new crossbred dairy-beef offering are now on the ground at a Pamu (Landcorp) farm near Taupo.
Spinach is NZ's favourite leafy green, according to the Department of Statistics.
